What is a Prediction Market?

A prediction market is a way for individuals to bet on future outcomes.

Applied throughout the product life cycle, markets can be used to deliver accurate answers for many questions:

 

Innovation

  • If we make this, will it sell?
  • Cost required to develop?

Project Management

  • When will we really launch?
  • How will customers rate it?

Demand Planning

  • How many units will sell in Q2?
  • What will be our market share?

Essence of a Prediction Market

  • Knowledge is dispersed—many participants are invited
  • Multiple questions are asked—participants can choose where they have knowledge
  • Knowledge is weighted—participants can vary the level of their bet, depending on their confidence
  • Accuracy is rewarded—as forecasts are realized, bets are closed out, winners are recognized
  • Results are astoundingly accurate